David Brown of Lift interviewed Aphria (TSXV: APH) CEO Vic Neufeld. Aphria is a licensed medical cannabis producer based in Leamington, Ontario.
- Company completed major expansion in October and received authorization to utilize it in February. The first crop should be ready for harvest for in 5-6 weeks
- The company has addressed a capacity constraint and can now bring on new patients
- Aphria will be introducing new strains requested by their customers, expanding beyond its balanced offering with 4 new high-CBD and high-THC strains
- After research and dialogue with other LPs, the company will be using Waters supercritical CO2 extraction equipment and will be using MCT (and possibly hempseed oil) to blend. The company is intentionally slow to roll out new products, and the initial 3 offerings will be balanced.
- New Treasure Island strain is 15% CBD and company will analyze patient demand to incorporate it into extracts
- Neufeld is less bullish on oils and expects the market to develop slowly. In the near-term, he expects smoking and vaporization to represent 80% of the market
- More oncologists and other doctors could drive quicker adoption of oil, and Aphria will adapt to market conditions
- Many LPs are refining their extraction processes
- Neufeld feels six months may not be long enough for MMPR to become fully constitutional and expects that there could be a six-month extension
- He expects Health Canada to continue to regulate production similarly to the current rules.
- The supply-chain for dispensaries needs to be addressed, and Neufeld thinks that there is a role for the current dispensaries if they were to purchase product through licensed producers
- Neufeld expects the pharmacy model to work well given its experience with narcotics and the demonstration of patient care and the ability to perform age verification. Additionally, pharmacies are national, while other solutions are more complex due to provincial governance.
- Pharmacies are more likely to offer both flower and oil if permitted and thinks that they offer a good platform for adult-use
- Aphria has multiple platforms for patient acquisition, and they are seeing a range of performance. The company is converting former black-market buyers who are able to by safer product that is higher quality at a lower price. The company has also had success with first responder communities (which have insurance coverage)
- MMPR has evolved over the past two years, raising the quality bar and employing higher standards
- Neufeld doesn’t think the current infrastructure across Canada is ready for the demand from legalized adult-use
- To retrofit greenhouses, Aphria can invest $55 per s.f. and complete the project in seven months, considerably less expensively and quicker than peers
Listen to “Interview with Aphria CEO Vic Neufeld”: https://news.liftcannabis.ca/2016/03/19/aphria-vic-neufeld/